Government as a Venture Capitalist - by Ron Paul

In January 2009, the administration claimed that if Congress passed a
rush stimulus bill, the United States would be saved from economic
catastrophe that was threatening to send unemployment figures above 8
percent. Government stimulus was the answer and if we cared about our
country, we would set aside our reservations and do what needed to be
done to pass the bill. Congress passed the bill. Unemployment
continued to go up and has been well over 8 percent ever since. (In
fact, economist John Williams of ShadowStats finds unemployment to be
closer to 23 percent using traditional methodology.) Yet some are
claiming the first stimulus worked and all we need to bring back
prosperity is more government stimulus.

Stimulus might appear to work for some people for a short time. It
worked for a short time for Solyndra. For a time, they could pretend
to be engaging in productive activities that would help the economy. For a time, unemployment was 1,100 people less. But the recent
bankruptcy of Solyndra shows that the government is a terrible venture
capitalist. This charade cost the American people over half a billion
dollars they could not afford, yet there is no mea culpa. The
administration is not questioning its calculations, or how they could
have been so wrong on their unemployment predictions in the wake of the
last stimulus.

Instead, they want more money. Once again we are hearing the cry
that if we care about our country, we will approve more spending and
more taxes and that will create more jobs. They promise.

Yes, you could have gone to the Solyndra factory and you would have
seen jobs. What you could not have seen were the productive jobs that
were never created. Real venture capitalists make decisions based not
on politics and photo opportunities, but on complex economic estimations
of risk and reward. They don't simply throw piles of other people's
money at a factory and expect magic to happen. The uncreated jobs you
can't see might still be around. Instead, we have more government debt
which will lead to more inflation and more taxes. These, in addition
to an already hostile regulatory environment, only add to the burden and
risk of job creation in the private economy.

It has been said that when all you have is a hammer, everything is a
nail. Our government is full of people who sincerely believe big
government and more spending is the answer to every problem. They
automatically look to government for every solution. Government is
their hammer, and all they know to do is to keep hammering. When
government "solutions" still don't solve the problems, they are
unfazed. They keep calling for more government, more laws, and more
programs. Americans are tired of being treated like nails.

This government-centric mindset is the root of the problem. People
who think this way are naturally drawn to politics and government. To
them, the Constitution is an annoying road block, something to get
around, or ignore.

We must become interested in real, lasting, productive jobs - careers
that allow families to build up a solid foundation of prosperity and
economic security - not pretend make-work government jobs that waste
resources and vanish overnight. We have to choose one or the other.